Liz Truss, as expected, announced the energy price cap will be frozen at £2,500 for two years for households and small businesses.
She also scrapped the ban on UK fracking, which came into effect in 2019, claiming we could have shale gas flowing in as soon as six months.
The frozen household energy cap was £1,000 less than the new £3,500 price cap that had been planned to start in October, and most households will also receive a £400 support package.
Homeowners and most renters can expect their bills to amount to a maximum of £2,100 from October, which is roughly double the level of the energy price before this year.
The price cap had been in the vicinity of £1,042 to £1,277 since it was introduced in 2019 - until April 2022 when it was hiked to its current level of £1,971.
Businesses will see their energy costs capped at the same price per unit that homes will pay, but just for six months.
This will be reviewed after three months and potentially extended for certain industries and the most vulnerable businesses.
Schools, colleges and charities will also receive aid to alleviate the blow of higher bills.
The prime minister also confirmed a new scheme with the Bank of England, worth up to £40bn, to help firms in the wholesale energy market stabilise prices and decrease the likelihood that suppliers will need to be bailed out.
Chancellor Kwasi Kwarteng will outline the expected costs of the energy package in a statement later in September.
North Sea, nuclear and renewables
Truss said there will be more North Sea oil and gas production to ramp up supply in the medium-term, with over 100 new licences to be awarded.
She also vowed to speed up the deployment of clean and renewable energies in the coming years.
Gas, renewable and nuclear energy companies are also being asked to supply electricity well below current market rates, with new longer-term contracts.
The plan, which has been backed by energy companies including SSE PLC (LSE:SSE) and EDF, risks “delaying but locking in” the windfall profits these companies have enjoyed in recent months, the Resolution Foundation thinktank warned, while Labour called it “a terrible deal for the British people”.
The UK Energy Research Centre, which proposed the plan, said “a dodgy deal is not inevitable” as prices could be capped.
Truss blamed previous prime ministers for not focussing enough on securing energy supply, with no new nuclear reactors built in the UK in the last 25 years, for example.
She insisted nuclear energy will account for a quarter of the UK's electricity generation by 2050.
The PM promised to end the UK's short-term approach to energy supply "once and for all."
Truss said the government will ensure the UK is a net energy exporter of energy by 2040 via the adoption of fracking, as well as expanding nuclear and renewable energy generation.
The government will "conduct a review to ensure we deliver net zero by 2050 in a way that is pro-business and pro-growth".
She also commented that action is currently being taken to slash the cost of energy in the long term.
A new Energy Supply Taskforce is negotiating with suppliers to agree on long contracts that reduce the price they charge for energy, while similar talks with renewable producers will also be held.
What was not included
Several mooted measures did not get mentioned by the new PM, including decoupling gas prices from the cost of cheaper renewable energy including wind, solar and tidal.
Truss also did not propose extending the cut in fuel duty to keep petrol and diesel prices lower.
Nor was a potential VAT reduction, which was rumoured to be slashed to 15% from 20%, broached yet, though it could be by the new chancellor of the exchequer Kwasi Kwarteng, as well as a mooted raising of the personal tax-free allowance.
Downing Street could also still cancel the planned rise in corporation tax – to 25% from 19% – that previous chancellor Rishi Sunak inked in for next April.